FTC Turns Deaf Ear to Google's 'Ignorance' Defense in Safari Snafu

By Erika Morphy
Jul 11, 2012 8:00 AM PT

Google is about to be smacked with the highest fine ever levied by the Federal Trade Commission -- US$22.5 million -- according to reports. The search engine is expected to agree to the stiff penalty to put to rest the agency's concerns over its apparent privacy violations in connection with Apple's Safari Web browser.

The settlement will close another chapter in Google's ongoing privacy story, this one stemming from
a report by Stanford researcher Jonathan Mayer, who found that Google had circumvented privacy settings on iPhones and iPads and was tracking users of those devices -- contrary to the terms of its own privacy policy.

Google has claimed the tracking was inadvertent and said that the FTC was focused on a 2009 help center page published a year before Apple changed its cookie-handling policy. The page has been changed, and Google has taken steps to remove the ad cookies from the browsers.

Accidental, My Eye

Despite Google's protestations of innocence, or at least ignorance, consumer advocate organizations including Consumer Watchdog decried Google's behavior and filed suit with the FTC. Needless to say, they are delighted about the reports of an impending settlement.

"What made it even worse is that they lied to users about what they were doing," he added. "Google told people they were honoring the Safari browser settings."

In fact, that is how Google found itself in trouble with the FTC. It is not clear if circumventing the privacy settings was illegal, Justin Brookman, director of consumer privacy at the Center for Democracy & Technology, told the E-Commerce Times. Where Google erred was in saying on the help page that it was not circumventing the settings.

That, plus the consent decree the FTC forged with Google after the Buzz privacy debacle, is what gave the agency leverage to bring Google to the negotiating table. The decree allows for penalties of up to $16,000 per violation per day.

Clearly, $22.5 million doesn't meet that astronomical ceiling, but the threat of the FTC applying it was enough to get Google to negotiate, Brookman surmised.

Google noted in its statement that the help page in question was published more than two years before the decree.

"Without the consent decree in place, the FTC would have had limited authority in this case," Brookman said. "Also, the FTC is generally litigation-averse and tries to settle most matters."

A Bolder FTC

Still, it is clear that the FTC is stepping up its interest in companies that deal with consumer data, especially online data, Dennis Dayman, chief privacy and security Officer at
Eloqua, told the E-Commerce Times.

"At almost every intersection, the FTC is looking at upholding Section 5, which prohibits entities from engaging in unfair or deceptive acts or practices in interstate commerce," he said.

Usually in those cases, the FTC has taken actions against websites for violating their own privacy policies as a defined deceptive trade practice, Dayman said.

Also, the fines have increased over the years, he continued, although typically the amount has been dependent on how much of an impact the violation had on end users.

A Win Win

Although there has been some griping that the fine is a mere slap on the wrist for Google, the FTC will burnish its reputation as watchdog of online privacy with this settlement, Michael W. Robinson, executive vice president at
Levick, told the E-Commerce Times. "Companies should count on the fact that they will continue to police it."

Google comes out a winner, of sorts, he added. "The sooner this issue disappears, the better for them."

Reputation-wise, this is more serious as it is the largest such fine in FTC history, Scott Cleland, publisher of GoogleMonitor.com, told the E-Commerce Times. "It will be an official part of Google's privacy rap sheet forever."